Ghana’s Finance Minister, Mohammed Amin Adam, announced on Thursday that the country would invite investors in its Eurobonds to exchange their existing bonds for newly issued ones.
This move marks a significant step forward in Ghana’s ongoing debt restructuring process.
Bondholders will have the option to swap their holdings for a “disco” bond, offering an interest rate of 5% that will increase to 6% after mid-2028.
The maturities for these bonds will range between 2026 and 2029. However, this exchange will come with a 37% principal writedown.
Additionally, creditors will have the opportunity to exchange their bonds for a par bond, capped at $1.6 billion.
This option includes three instruments, with the main one offering a coupon of 1.5% and maturing in 2037.
Unlike the disco bond, there will be no haircut on the principal, although past-due interest will be written off.
The bond exchange offer is expected to last for 21 days.
Ghana’s default on most of its $30 billion in external debt in 2022 was a result of several factors, including the COVID-19 pandemic, the war in Ukraine, and rising global interest rates.
The country’s restructuring deal, announced on June 24, follows a similar process undertaken by Zambia, which also completed its debt rework in the same month.